I’ve only recently come to realize how much I value scientist characters in movies – think Doc Brown in Back to the Future, Abby Sciuto from NCIS and Q in James Bond.
They usually aren’t the hero, yet they play a vital role in solving a challenge or giving the lead character an edge.
For me the exact same approach applies to business – investing in a scientist who understands how to churn raw data into meaningful insights does not only make for better marketing strategies but also helps to find new ways to solve a challenge. The art and science behind plugging numbers into a spreadsheet require a special skill that can marry the analysis of facts and data with the creative theory development and experimentation to drive better business decisions and set you up for success.
Here are three key data areas that will empower you to make better decisions, grow your bottom line and give your business an edge.
1. Google Analytics
Google Analytics, or the web analytics service offered by Google, tracks, and reports all your website traffic and has a wealth of information to optimise your business. You need to know.
Which sites your visitors were at before they land on your website.
Knowing which websites visitors were at before they landed on yours helps you understand where to spend your time and money. For example, you may justify investing most of your time and energy posting on Facebook because that what the social media experts are saying, but if Google Analytics indicates that only 1% of traffic to your website comes from Facebook, then you’re wasting your time. I’m not saying Facebook isn’t important as a marketing strategy, but in this instance, Facebook may be better utilised as an engagement channel for your existing clients rather than an acquisition tool to find new clients.
How long people are staying on your site.
It takes about 50 milliseconds for a user to form an opinion of your website, so knowing how long visitors stay on your website helps to know if you need to improve your design, if your content is engaging or if they can easily find the information they’re looking for. It is also a key metric Google uses in your organic search listing. If someone lands on your site and bounces straight off onto the next site on their search for information, Google views your website as not answering what the user was interested in and drops your position.
How many new and returning visitors you have.
The internet doesn’t hand out second chances and bad user experience and lack of credibility can be detrimental to your business. Knowing how well you do at attracting new visitors and designing strategies to engage and retain them is key.
Customer Relationship Management (CRM) software offers solid data analysis on customers’ history with your business which is an important tool to improve your relationship with them. The higher their engagement and trust, the more your customers will support you which ultimately means growth in revenue. The following CRM data statistics are important to know
Who your best clients are.
By understanding who spends the most with you, allows you to look after the customers better and gives you insights into how to find more clients with the same behaviour.
Understanding their spend with you.
Knowing how much the average customer spends and how often they spend with you, determines how much you’re willing to pay to acquire a new customer. I’ve worked with businesses whose cost to acquire a customer is higher than the profit made from the product they are selling to those customers – so, they’re paying their customers to shop with them! Until you know exactly how much profit you make on each line item in your product range, you should not be spending money on marketing.
Understanding your products.
Digging through your CRM will not only tell which products are more popular but also show you the products that take more effort or engagement to sell. You may have a $100 product that sells like hotcakes and delivers a $15 profit but requires multiple engagements with your call center, so your hot seller actually costs you money.
3. Marketing spend.
Marketing spends typically includes activities such as content marketing, paid advertising, SEO, social media, trade shows, and non-price promotions. Understanding where and when you are spending your marketing dollars will help you answer questions like:
Where do you get your highest return on marketing investment?
Say you’re spending marketing money on Facebook and Google. Facebook may be driving more clients at a low cost per acquisition (CPA) while clients acquired via Google may be spending more and staying longer, even though their CPA is a bit higher. Which is your better option – Facebook or Google? Having this insight helps you to know where you need to be spending more.
What is your conversion ratio?
Knowing your conversation ratio is a key metric to understanding how much marketing money you need to spend. Knowing that 5% of all visitors on your website convert to buying a product, that they spend $100 and you make $10 profit per sale, indicates that you should not spend more than $0.25 per click to get a person on your site.
Which part of your user journey is the most important?
Having an understanding of which marketing channel or activity drives real value for your business will guide you to choose the right attribution model for your business.
I hope the questions and key data points I shared will help you get your data science-groove on. Business leaders and movie heroes alike who embrace the science of data propel ahead of their competition. Frederick Winslow Taylor developed Scientific management or management strategies for a more efficient way of working in the 1800s. He did this by borrowing the theory of analysis, observation, synthesis, rationality, and logic from botanists and chemists.
Elon Musk and Batman have both embraced the science principal successfully. Tesla is currently valued at over $100 billion after 17 years in the market, making it worth more than Ford and General Motors combined. Batman has 10 live-action feature films more than any other superhero. The Dark Knight and the Dark Knight Rises earned over $1 billion worldwide, making Batman the second film franchise to have two of its films earn more than $1 billion worldwide.
It’s time. Embrace your inner scientist and let your dark knight rise…